Everyone has encountered the Pareto principle whether they know it or not.
You’ve encountered it. I’ve encountered it. Whether we’ve used it to our advantage or not is a different matter altogether. Some of you may know it as the 80/20 rule and may have even read about it. For those who have no idea what I’m talking about lets have a recap before we go any further.
It was 1906 when Vilfredo Pareto made an observation that would redefine how many would approach management analytics in years to come. He noted that 80% of wealth in Italy, in this case property, was controlled by 20% of the population. He would later end up taking this down a sociological route but for business and management alike the significance is different.
It became clear that two independent variables can have disproportionate relationships. A simple example would be that 20% of your customers generate 80% of your profits. The logic here would therefore be to define the traits of those customers and seek more of them.
In healthcare, there are numerous potential avenues where we can look for these relationships. We can investigate the processes which disproportionately cause delays in waiting times, we can review which issues cause the most delays when doctors are on call, we can look at which doctors cause a disproportionate amount of complications and we can analyse what in their practice does so and eliminate it and so on and so forth.
80/20 Analytics can indicate positive patient management too as the sickest patients should take up a disproportionate amount of a doctors time compared to other patients on a ward.
The examples are there. We just have to look for them and then do something about them.
Dr Saif Abed
CEO and Co-Founder
Abed Graham Healthcare Strategies Ltd